NEW YORK (Reuters) - To stop a sell-off of debt and other assets, the U.S. government will have to bring in new policies to open up the Treasury Department's balance sheet, said the manager of the world's biggest bond fund on Thursday."If we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury," wrote Bill Gross, chief investment officer of Pacific Investment Management Co, or Pimco, in his September Investment Outlook."To ultimately stop this asset/debt deflation, a fresh and substantial new source of buying power is required," Gross wrote.Across financial markets, liquidity is drying up and investors' risk appetites are "anorexic." Despite a recent resurgence in the stock market, asset prices are mostly falling, including those of commodities, Gross noted.In this uncertain environment, private sector investors are increasingly reluctant to risk committing any more of their own capital, he added.(Reporting by John Parry; Editing by Tom Hals)
(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
